The central bank is likely to raise its benchmark interest rates later this month -- marking the 14th quarterly increase since October 2004 -- to stem inflationary pressure, but an opposition lawmaker yesterday questioned the effect of a rate increase.
The central bank is scheduled to hold its quarterly board meeting on Dec. 20, with market observers predicting another 0.125 percentage point increase in the discount rate as higher food and oil prices fuel concerns of further inflation.
Chinese Nationalist Party (KMT) Legislator Lee Jih-chu (李紀珠) yesterday urged central bank Governor Perng Fai-nan (彭淮南) to take measures to counter the under-valuation of the NT dollar.
"The central bank shouldn't have used the nation's excessive [US$40 billion] capital outflow as an excuse to weaken the NT dollar's exchange rate [against the greenback]," Lee told Perng in private discussions after yesterday's legislative session.
She said domestic investors cared less about the NT dollar's exchange rate when investing in US dollar-denominated overseas funds or Chinese shares, which often guarantee a lucrative capital reward compared to any meager exchange losses.
Weakening the NT dollar will not be effective in curbing future capital outflows by a small minority of high-income earners, Lee said, but is instead likely to drive up domestic commodity prices since prices of imported goods are sure to go up.
By hiking interest rates, the government is unfairly leaving the general public with a relatively lower income against the backdrop of higher import prices and climbing rates, Lee said.
Another interest rate hike would tighten the monetary supply, which will contribute to financial woes for businesses with loans and hurt the local economy in the long run.
In response, Perng said the central bank would "prudently review the consequences of another interest rate hike," prompting speculation the consecutive hikes could come to an end.
Perng also rebutted reports that the central bank had intervened in the NT dollar's appreciation.
"The central bank will allow the market to decide the valuation" of the NT dollar, he said.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
RSS